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Illinois Attorney General reaches $4.5 million settlement with Chicago-area gas stations under the Illinois FCA

In the Fall of 2017, Illinois Attorney General Lisa Madigan's office announced a $4.5 million settlement with 13 Chicago-area gas stations and two gas station owners under the Illinois False Claims Act, claiming sales tax fraud. More

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FCA Allegations Regarding Employee Billable Time in U.S. Disaster-Relief Efforts Survive Motion to Dismiss

On September 27, Judge Oetken of the Southern District of New York granted in part and denied in part defendants' motion to dismiss an FCA whistleblower's claims that CDM Smith, Inc. and CDM Constructors, Inc.—subcontractors of USAID who were involved in rebuilding efforts in Pakistan after the devastating 2005 earthquake—had submitted false billing claims to the government for employee time and subpar work. The whistleblower, Saif Hussain, a former CDM engineer, also alleged retaliation. The court allowed the allegations concerning employee billable time to go forward, applying the recent Chorches standard in Hussain's favor. More

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Four Houston-Area Hospitals Pay $8.6 Million to Settle Ambulance Swapping Allegations

Four Houston-area hospitals have paid $8.6 million collectively to settle allegations of "ambulance swapping"—that ambulance companies paid kickbacks to the hospitals in exchange for the hospitals' lucrative Medicare and Medicaid transport referrals. The hospitals—Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center, and East Houston Regional Medical Center—are all affiliates of the Nashville-based Hospital Corporation of America. More

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New York-Based Contractors Settle FCA Allegations that Company Improperly Obtained Federal Contracts for Service-Disabled Veterans

The Justice Department announced earlier this month that Alden, New York-based contractors Zoladz Construction Company Inc., Arsenal Contracting LLC, and Alliance Contracting LLC—all owned by John Zoladz of Darien, New York and David Lyons of Grand Island, New York—paid more than $3 million to settle False Claims Act allegations that they fraudulently obtained federal contracts set aside for service-disabled veteran-owned (SDVO) small businesses. More

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Texas Nursing Home Settles FCA Rehab Services Fraud Claim for $600,000

Texas nursing home company Regent Management Services, L.P. paid $600,000 in August of this year to settle a False Claims Act case brought by one of its former employees in 2014. More

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Ninth Circuit Affirms FCA Grant Fraud Finding Against Chabad of California

On September 7, the Ninth Circuit affirmed that Chabad of California was liable for federal grant fraud under the False Claims Act for its noncompliance with financial management standards imposed as a condition of participation in the Urban Areas Security Initiative: Nonprofit Security Grant Program run by the Department of Homeland Security. See United States ex rel. Kozak v. Chabad of California, No. 15-17246 (9th Cir. Sept. 7, 2017). More

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Department of Justice Announces Mylan Settlements

On August 17, the Department of Justice announced a landmark $465 million settlement in a False Claims Act action against pharmaceutical companies Mylan Inc. and Mylan Specialty L.P., best known as the makers of EpiPen, a critical emergency medication for individuals suffering from life-threatening allergies. More

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Department of Justice—With the Help of Whistleblowers—Continues to Vigorously Pursue Cases of Fraud Against the Government

Earlier this month, the Acting Assistant Attorney General for the Department of Justice Civil Division, Chad Readler, reiterated the government’s commitment to combating fraud. More

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Materiality after Escobar: Why Government Behavior after a Defendant Presents a False Claim Is Not Dispositive

In Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), the Supreme Court resolved a circuit split over the implied false certification theory of liability under the False Claims Act (FCA). As opposed to express false certification, where the defendant allegedly has made an affirmative false statement regarding its compliance with underlying statutory or regulatory requirements, implied false certification is based on the defendant's failure to disclose its noncompliance with these requirements. In Escobar, the Court upheld implied false certification as a valid theory of liability under the FCA, but tightly circumscribed its scope through a "rigorous" interpretation of the Act's materiality and scienter requirements, holding that "[a] misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be material to the Government's payment decision in order to be actionable under the False Claims Act." Escobar, 136 S. Ct. at 1996. More

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Government and Whistleblowers Bring More False Claims Act Cases in 2017

The current administration recently made it clear that it will continue to vigorously investigate and enforce the law prohibiting attempts to defraud the government.  False Claims Act (FCA) lawsuits continue to trend upwards as the Department of Justice files a second complaint against UnitedHealth Group Inc. (UHG) within two weeks.  This development follows on the heels of the prior complaint, United States ex rel. Swoben v. Secure Horizons, which outlined allegations that UHG defrauded Medicare programs with false claims for payment. More

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